Assessment u/s. 153A can be made only on the basis of incriminating material found during search

We have carefully considered the submissions and perused the records. We find that the value of the property in this case as reflected in the registered sale deed was Rs. 55,00,000/-. Reference u/s. 142A was made to the DVO by the Assessing Officer. DVO determined the value of the property at Rs. 70,36,700/- as against Rs. 55,00,000/- shown by the assessee. Hence, there was difference of Rs.  15,36,000/-. This was added to the income of the assessee. However, Ld. Commissioner of Income Tax (A) deleted the addition as there was no evidence of adverse material regarding payment of under hand consideration. Similarly, no other incriminating material was found during the course of search. In our considered opinion, Ld. Commissioner of Income Tax (A) is correct in this regard. Addition in this case has been made pursuant to search on the basis of Valuation Report of the DVO. It has been settled that in case of search in the absence of any incriminating material found during search, no addition can be made on the basis of Report of the DVO. In this regard, the case laws referred by the assessee are germane and support the case of the assessee. We may further refer to the following case laws:-

a) C.I.T. vs. Abhinav Kumar Mittal [2013] 351 ITR 20 (DHC) Held, dismissing the appeal, that there was no material found in the search and seizure operations, which would justify the Assessing Officer’s action in referring the matter of the District Valuation Officer for his opinion on valuation of the properties. Therefore, the valuation arrived at by the District Valuation Officer would be of no consequence. In any event, the Tribunal had also, on facts, held that the   District Valuation Officer’s valuation was based on incomparable sales, which is not permissible in law.

b) C.I.T. vs. Mahesh Kumar (2011) 196 Taxman 415 (DHC) Where no evidence could be gathered that assessee had invested more than value declared in registered sale deed of plots purchase and, comparable instances taken by the Valuation Officer were situated for way, addition made under section 69 on account of unexplained investment with respect of purchase of said plots was not justified.

From the above, it is evident that in the absence of any evidence that the assessee has invested more than value declared in the registered sale deed of property purchased, the addition in this regard on the basis of Valuation Report by the DVO is not sustainable.

Furthermore, we find that in this case the assessment was made u/s. 153A of the I.T. Act. Hence, reliance upon the decision of the Special Bench in the case of All Cargo Global Logistics Ltd. (Supra) is also germane and support the case of the assessee. As expounded in this case assessment u/s. 153A can be made only on the basis of incriminating material found during the course of search.